Reuters GraphicsThe Tel Aviv Inter-Bank Offered Rate, or TELBOR , a proxy for interest rate expectations, shows markets are now pricing in just over 50 bps of rate cuts over the next 12 months.
"We thought the market was overreacting and exaggerating a rate cut in the (Oct. 23) decision, during the war," Bank Hapoalim's Shafrir said.
The central bank's own economists project 50-75 bps of rate cuts in the next year.
Prior to the war, markets had predicted that the benchmark rate would be lowered by at least 100 bps through 2024 as inflation returned to its target range.
Israel's next rate decision is due on Nov. 27 with markets currently expecting rates to be held, and the three-month TELBOR rate pointing to a 25 bps cut in early 2024.
Persons:
Violeta Santos Moura, Morgan Stanley, Georgi Deyanov, Modi Shafrir, Amir Yaron, Andrew Abir, Shafrir, Yaron, Anatoliy Shal, Shal, Steven Scheer, Karin Strohecker, Sumanta Sen, Kirsten Donovan
Organizations:
REUTERS, Palestinian, Hamas, Bank of Israel, Bank Hapoalim, Reuters, Tel Aviv Inter, Monday, P Global Market Intelligence, Thomson
Locations:
Israel's, Gaza, Israel, LONDON, Jerusalem, London